Overnight Markets Decline As OPEC Sees Oil At $75

Overnight markets are trading lower, even though the S&P futures are holding above the break-even line. Over the last few days, the financial markets followed the same template, overnight spot markets opening lower while the S&P futures traded side-ways.

OPEC is meeting today in Vienna, at their periodical meeting, and it seems some of the member countries want to see oil prices more expensive. The Saudi oil minister said in an interview that the world economy has stabilized for now, and has the potential to support oil at 75-80 dollars per barrel. Moreover, a growing number of OPEC members share the Saudi minister’s view, unfortunately,

TheLFB-Forex.com Trade Team said that, oil at $80 has the potential to slow the recovery of the global economy substantially. The global economy needs its source of cheap energy in order to start growing once again, and more importantly, it needs consumers to spend their money on goods and services, rather than gas. At the last few press meetings, Mr. Trichet said that a global recovery could be achieved only if commodities remain relatively cheap.

Japan’s leading party shares a comparable view with OPEC members, the global economy has stabilized so it does not need any more help. The Liberal Democratic Party proposed at the height of the credit crisis that the Government should buy $520 billion worth of shares from the Japanese stock market. Initially, this bill was rejected by the Japanese opposition party and right now even its author plans to abandon it, because the financial markets have bottomed. As a note, the Japanese Nikkei touched a 26-year low just a few months back.

Overnight, the Japanese Nikkei added 12.62 points (0.13%) to 9,451.39. The Australian S&P/Asx fell 45.40 points (1.19%) to 3,755.70. The U.K. Ftse declined 54.43 points (1.23%) to 4,361.80, while the German Dax fell 47.56 (0.95%) to 4,953.21

Crude oil for June delivery was recently trading at $62.90 per barrel, lower by $0.55.

Gold for June delivery was recently trading lower by $6.80 at $948.40.